January 24, 2022

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Biden administration threatens to claw back Covid funds from Arizona over school anti-mask policies

2 min read

U.S. first lady Jill Biden speaks with people during a tour of a COVID-19 vaccination site at Isaac Middle School in Phoenix, Arizona, June 30, 2021.

Carolyn Kaster | Pool | Reuters

The Biden administration on Friday threatened to rescind millions of dollars in federal coronavirus aid for Arizona, accusing the state of using the funds to undermine efforts to stop the spread of the virus.

Republican Gov. Doug Ducey’s office has 60 days to either change two federally subsidized state school programs totaling $173 million, or redirect the money toward “eligible uses,” the Treasury Department said in a letter.

The programs impose conditions that discourage compliance with wearing masks in schools, contradicting guidance from the Centers for Disease Control and Prevention on how to reduce Covid transmission, the letter said.

If Arizona fails or refuses to comply with Treasury’s demands, the Biden administration may claw back that stimulus money and withhold a second tranche of pandemic relief funding, Treasury said.

Ducey’s office did not immediately respond to CNBC’s request for comment on the letter.

The federal funds in dispute come from the Coronavirus State and Local Fiscal Recovery Funds program, or SLFRF, a $350 billion chunk of the multitrillion-dollar Covid relief package, dubbed the American Rescue Plan, that President Joe Biden signed into law last year.

The funds are intended “to mitigate the fiscal effects stemming from the COVID-19 public health emergency, including by supporting efforts to stop the spread of the virus,” Treasury noted in the letter to Ducey’s Office of Strategic Planning and Budgeting.

But Arizona’s two school programs use the federal money to “impose conditions on participating in or accepting a service that undermine efforts to stop the spread of COVID-19 and discourage compliance with evidence-based solutions for stopping the spread of COVID-19,” the letter said.

The $163 million Education Plus-Up Grant Program, for instance, allows funds be…

2022-01-14 13:01:56

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